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Etna Auto Solutions, LLC; 505 Stage Road, Rte 2; Etna, ME 04434 - Order
September 9, 2015
This matter came on for an administrative hearing on Wednesday September 9, 2015, on the petition by the staff of the Bureau of Consumer Credit Protection alleging noncompliance with the provisions of 10 Maine Revised Statutes, sec. 1194. Hearing Officer William Lund presided; Eric Wright, staff attorney represented the bureau; and sworn testimony was taken from the consumer, Julie Adams; David K Robinson, sales manager at the dealership; and Brian Curtin, owner of the dealership.
The parties presented their cases articulately, and both the dealership and the consumer were given opportunities to state their positions and to raise questions about the accounts of others.
Taken in the broadest context, the basic facts of the case are not in dispute ? the consumer purchased a 2005 Avalanche from the dealership; the dealership attempted to assign (sell) the credit sales contract to a California sales finance company named Consumer Portfolio Services (CPS); CPS notified the dealership that it would not purchase the credit sale contract; and the dealership used a spare key to recover the vehicle from the home of the consumer.
Many of the finer details of the case are in vigorous dispute ? the dealership was upset because the consumer failed to show up for the sale at the originally-planned appointment date; the consumer felt items were removed or changed before she picked up the vehicle; and the consumer felt blind-sided by the apparent requirement that the assignee sales finance company obtain information permitting them to debit payment amounts directly from the consumer?s bank account.
Over time, the relationship deteriorated even further ? CPS communicated to the dealership that the phone numbers for two of the consumer?s five ?references? were not working numbers; the dealership?s mechanic told the consumer?s daughter at her place of work that her mother should communicate with the dealership or CPS; the consumer became upset when her references were contacted by CPS and were allegedly told the reason CPS was trying to reach her; a tentative agreement was made between the consumer and the dealership that the vehicle would be returned and a down payment of $1,000 be refunded to the consumer; when she arrived for this exchange she balked when the dealership stated it needed to inspect the underside of the vehicle; and the consumer called the local police to intervene.
The consumer drove the vehicle away from the dealership, soon after which the dealership retrieved the vehicle using a duplicate key.
After hearing the testimony and reviewing the law, I find that 10 MRS sec. 1194 applies in this case, and controls the outcome. The Maine Legislature enacted this law in recognition that ?un-winding? a deal because an assignee refuses to purchase a credit sales contract, is a situation fraught with potential emotional harm. An average consumer does not understand the complexity of a credit sales transaction followed by an assignment to another purchaser. They are told that their financing has been ?approved,? and they take possession of the vehicle. They register the vehicle, insure it and treat it as their own, prepared to make the necessary financial commitment for the term of the contract.
Then they are told the contract is ?canceled,? by an entity that was not even a party to the original contract between the consumer and the dealership.
The Legislature reviewed these situations, and placed a burden on the dealerships, understanding that the dealership has the option to not give the consumer possession until all the assignee?s conditions have been satisfied and the dealership has a buyer for the contract.
Maine law does not prohibit these rescissions (which are often referred to as ?spot deliveries? or ?streeting the car?). Rather, the law makes certain requirements on the dealership. First, the consumer must be specifically told, presumably through use of a written form, that the dealership is reserving the right to cancel the contract, but that in doing so the dealership will refund any down payment, registration or government fees to the consumer, in effect making the consumer whole.
In this case, the condition precedent ? providing the consumer with the specific form carrying the prescribed language ? was not done by the dealership. The dealer?s representatives professed not to be aware of the existence of the law or of the required form, which has been in use in many dealerships since 2001.
REMEDY
Because I find that the above-cited statute applies to this case, I order that the dealership return to the consumer the $1,000 down payment which she provided as part of the original transaction. Payment must be made within two weeks; i.e., it must be mailed so that it is received on or before Saturday September 26, 2015 at the consumer?s mailing address in Glenburn, Maine. A copy of the check and any cover note must also be simultaneously mailed to Eric Wright, Staff Attorney, Bureau of Consumer Credit Protection, #35 State House Station, Augusta, ME 04333-0035.
IT IS SO ORDERED.
| Date: September 09, 2015 | /s/William N. Lund |
| William N. Lund, Hearing Officer |
Notice of Appeal Rights
Any party aggrieved by this decision may appeal to the Superior Court pursuant to 9-A M.R.S.A. ?6-108(1) and 5 M.R.S.A. ?11001 et seq. within 30 days of receipt of this decision. Any other person aggrieved shall have 40 days from the date the decision was rendered to petition for review.
| Date: September 09, 2015 | /s/William N. Lund |
| William N. Lund, Hearing Officer |